One day, my wind farm will come to Gao

2005, we were a pool of European experts, landing in Bamako to prepare the Rural Electrification Master Plan of Mali, financed by the African Development Fund (ADF) and the Government of Mali. When we arrived, Malians were talking about a new wind farm to be built in Gao, one of the most remote city in the world. Studies were done, the project was proved to be economically profitable for the country, the site was identified and reserved, the contractor was selected, funds were granted, willingness was everywhere. Today, the wind is still uselessly blowing. Why nothing happened?

Tariff kills the project

The government and the project sponsor failed to agree on feed-in tariff. The tariff requested by the sponsor was fair and in line with international practices. But it was to high. “So” high that it was even higher than the price the final customers are paying for their electricity in Gao. Electricity in Mali is heavily subsidized by the government to support the national economy.

As mentioned above, the project was proved to be profitable. If one adds subsidies to the price of electricity, the sum is higher than the proposed feed-in tariff. The deal was valuable for the government. But not for the national company Energie du Mali (EDM) that operates Gao’s diesel generators and network, which has to buy the wind kWh at feed-in tariff and sell it at customers’ price.

Goodwill has its limits

Someone had to make concessions. The sponsor, no way. They are other opportunities around the world. EDM, difficult. Their balance sheet is already full of red. The government then. Yes, but… Who will finance the difference? The World Bank or another international donor? No. They don’t finance operation, only initial capital investments. Should then the Malian population finance the wind farm because of government’s subsidies on oil products?

Tackling the root of the evil

At this point, it is clear that as long as subsidies are granted for oil products, wind farm project will remain on paper. Many argue that touching them would automatically result in political and social instability. Discussions between the government and the World Bank have been underway for some time now. Alas, it seems that politicians and economists have different views.